Regulatory Policy in India

Forbes India, 5 October 2012

Extracts of an interview of Mr Angel Gurria, Secretary-General, published in Forbes India, emphasising the rôle of Better Regulation in the search for growth.

Q. What regulatory action do you advise for India?

First of all, every country can do better in terms of regulation. We've been working with a host of European nations, with the United States, with Mexico, Turkey, Japan, and even with Australia, which has led the world for decades in terms of better regulation and simplification.

In India, there are three key areas where better regulation could help boost productivity and growth. First, by easing business regulation to boost entrepreneurship and dynamism, and to support job creation in the formal sector. Second, by further reducing the barriers to international trade and investment, including FDI, to boost competition and productivity. Third, by undertaking wide-ranging financial sector reforms to strengthen investment.

(...) As in every country in the world, there is also scope for simplification. A specific regulatory issue in India concerns the relationship between the federal government, the states and then local governments. State and local governments are bound by national laws. This relationship between the three levels of government sometimes produces three times the regulation and worse still, different types of regulation, which is time-consuming and expensive. For example, it has been well documented that the Indian central government and some state governments have achieved greater economic performance through enhancing the regulatory frameworks for a better environment for businesses. These efforts encourage investment, make it easier to start up a business, and to conduct business more generally. However, this has not happened in a concerted manner across different states or in a co-ordinated way. Tackling this issue head-on through a 'whole of government' approach will vastly improve the consistency and quality of the regulatory environment in India.

We can share with the Indians the successful experiences as well as some of the not so successful experiences from elsewhere so that they can save some time, effort and money. For example, in Mexico, the office of the controller working together with the OECD has done away with 12,000 norms, rules, codes, regulations, laws. Little steps, big steps, hard steps, but they have dramatically streamlined things.

Seminar: Building Governance Capacities in India, 3 December 2009, New Delhi, India

This seminar, organised in conjunction with CUTS International, aimed to increase awareness and understanding of how Indian officials responsible for regulatory policy can employ a "whole-of-government" approach to regulatory reform and to remove unnecessary burdens imposed upon business through the use of evidence-based policy making. The conference was attended by government officials, regulators, academics and lawyers, among others.

The seminar was divided into two sessions. The first session focused on better understanding the context and issues that influence the success of regulatory reform. The discussions included an examination of India’s regulatory environment in order to assess where and how regulatory barriers are an issue – taking into account important situational factors that prevent the wholesale adoption of solutions that have been applied in other countries. The second session aimed to identify particular challenges to the delivery of quality regulatory outcomes in India. Participants drew on the analytical work of the OECD on the causes of regulatory failure and the principles of regulatory quality.